Forums: Discussions for entrepreneurs and small business.

Thanks in advance for your help.

My two partners and I are raising money for a tech startup. We've been working with an advisor building our slide deck and business plan. Our advisor seems to believe we should go to the VC/Angel route but we have a large number of connections to folks who have expressed interest in investing low amounts of money (min 10k each). We're trying to get up and running as fast as possible (it requires some specialized equipment to start up) and it looks like raising the $250k we need from our own network would be the fastest approach. 

I'm familiar with terms sheets from VC's and the angel investment process. However, I haven't seen much documentation on raising in small chunks and I'm interested in hearing how that process should go.

 

Thanks!

Nick

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Nick,

While I don't have enough information about your specific situation to provide a definitive answer- I can offer the following general comments:

 

1. I understand your desire to get started. If the $250K will enable you to achieve  milestones that will significantly increase the valuation of the company and make it more attractive - then it could be a sound first round.

2. The funding situation you describe, would probably be best handled as a private placement which would probably require a PPM- along with a few other steps to ensure compliance and success.

3. since you indicate that you need some equipment to start up- I'd say you may be a bit early for the professional investment community (angels and VC types).

 

Hope this helps. If you would like to discuss your specific situation- feel free to drop me a PM or contact me directly.

 

 

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Business Growth Masters, LLC -
Capital Catalysts for Entrepreneurs
Home of the Scalable Business Plan and QuikStart Capital Programs
http://www.bizgrowthmasters.com
info@bizgrowthmasters.com

Hi Nick,

Would it possible to have any of your personal connections make a significant investment?

If they are good enough friends / leads maybe just have 2 people invest say 125k each as personal loans.

Have you discussed the structure of these small loans with a lawyer?  That would probably be the first step as most of these investors I would imagine will want a contract and some type of protection on their investment.  

 

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